Response To Be Published Early Next Year And Could Be Law By April 2015

The Government has announced that it is to launch a consultation exercise aimed at simplifying the auto-enrolment process for smaller firms.

The draft proposals include companies no longer being legally bound to enrol employees who have accrued savings above the lifetime allowance and taken out enhanced or fixed protection.

 There will also be exemptions, amongst other things, for employees who have handed in their notice within six weeks of the employer reaching their staging date. 

The Government has also proposed a simplified test for defined benefit schemes to prove they are good enough for use under auto-enrolment.

Also, the DWP has said that it wants to reduce the amount of information employers need to give to different types of employee from five to three.

A response to the draft proposals will be published in January 2015.

Expert Opinion

Most of the points in the consultation are not new and were in last year’s consultation. The only new ideas are on simplifying the communications and on that point, any actions that make life more straight forward for employers is to be welcomed.

“How this will work in legislation remains to be seen as the options appear to be either a two tier AE with different communication rules, or one unified system with all larger employers / system providers having to reshape their software to the new regime on fairly short notice to remain compliant.”
Nigel Bolton - Partner